Global business expansion weakened in January - PMIs

Reuters Staff

2 Min Read

The Dalian Shipbuilding Industry Co.,Ltd working area is seen at sunrise in Dalian, Liaoning province, January 1, 2013. REUTERS/China Daily

LONDON (Reuters) - The global economy continued to expand at the start of the year but business activity grew at a weaker pace than in December as growth rates in the United States fell, a business survey showed on Tuesday.

The Global Total Output index, produced by JPMorgan with research and supply management organisations, fell to 53.3 in January from December’s nine-month high of 53.7. It has been above the 50 mark that signals growth since August 2009.

“The global economy made a solid start to 2013. Output is being supported by the pillars of rising new business inflows, work on pipeline contracts and rising employment,” said David Hensley, director of global economics at JPMorgan.

“This should help sustain the expansion during the opening quarter, even if growth remains below trend initially.”

A sub-index for new orders nudged up to 52.6, its highest reading since March last year, and firms increased their workforce at the fastest pace since February 2011.

The Global Services index dropped to 53.6 last month from December’s 54.8, still comfortably above the 50 mark.

Services firms in the United States chalked up three years of back-to-back monthly expansion in January, although the pace of growth slowed from the previous month.

The euro zone’s battered economy is probably recovering but the gulf between its two biggest members - Germany and France -is widening, according to earlier data, while activity amongst Britain’s services firms unexpectedly returned to growth. <EUR/PMIS>

Figures released on Monday showed global manufacturing activity bounced back last month.

The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.